Pluripotent stem cells can differentiate into every cell type of the human body. Reprogramming of somatic cells into induced pluripotent stem cells (iPSCs) therefore provides an opportunity to gain insight into the molecular and cellular basis of disease. Because the cellular DNA damage response poses a barrier to reprogramming, generation of iPSCs from patients with chromosomal instability syndromes has thus far proven to be difficult. Here we demonstrate that fibroblasts from patients with ataxia-telangiectasia (A-T), a disorder characterized by chromosomal instability, progressive neurodegeneration, high risk of cancer, and immunodeficiency, can be reprogrammed to bona fide iPSCs, albeit at a reduced efficiency. A-T iPSCs display defective radiation-induced signaling, radiosensitivity, and cell cycle checkpoint defects. Bioinformatic analysis of gene expression in the A-T iPSCs identifies abnormalities in DNA damage signaling pathways, as well as changes in mitochondrial and pentose phosphate pathways. A-T iPSCs can be differentiated into functional neurons and thus represent a suitable model system to investigate A-T-associated neurodegeneration. Collectively, our data show that iPSCs can be generated from a chromosomal instability syndrome and that these cells can be used to discover early developmental consequences of ATM deficiency, such as altered mitochondrial function, that may be relevant to A-T pathogenesis and amenable to therapeutic intervention.